Stocks fell on Monday ahead of monetary policy announcement, which was mostly expected to be dovish; however, ongoing political turbulence amid virus's fifth wave spurred late profit-taking, traders said.
Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index lost 94.37 points or 0.21 percent to close at 44,923.91 points after testing a day high of 45,045.06 and a low of 44,796.84 points.
Darson Research in a note said the capital market failed to sustain the gains made in the last trading session with bears dominating the dull trading session.
Investors resorted to profit-taking in the consequence of Pakistan reported another 7,586 coronavirus cases during the last 24 hours while the country's positivity ratio was recorded at 13 percent, the brokerage added.
Zafar Moti, former director PSX, said the market could not perform well on the first day of the week despite encouraging dollar-rupee parity. Moreover, political uncertainty weighed, Moti said. “Capital market is sensitive. It digests the positive news but reacts negatively to bad tidings,” he said.
Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks closed lower amid a slump in global equities and investor concerns over ongoing political noise. Uncertainty ahead of SBP’s (State Bank of Pakistan) Monetary Policy Committee meeting, anxiety over IMF (International Monetary Fund) policy board review on January 28, and surging inflation pulled the stocks down, Mehanti said.
KSE-30 Shares Index also lost 21.04 points or 0.12 percent to end at 17,726.54 points. Traded shares, however, decreased by 16 million shares to 160.21 million shares from 176.13 million shares. The trading value dropped to Rs5.74 billion from Rs7.07 billion. Market capital shrunk to Rs7.709 trillion from Rs7.732 trillion. Out of 325 companies active in the session, 96 posted gains, 214 losses while 15 remained unchanged.
Topline Securities in its daily market review said said equities commenced the week on a negative note ahead of Monetary Policy Statement (for the next two-month).
The central bank held the policy rate at 9.75 percent later in the evening. Fertilisers, oil marketing companies, and power sector stocks contributed positively as FFC, EFERT, PSO, and HUBC cumulatively added 74 points, while TRG, SYS, and HBL collectively lost 83 points owing to profit-taking.
Sapphire Textile was the best performer of the day, rising Rs75 to Rs1,124 per share, followed by Siemens Pakistan, jumping Rs21.84 to Rs660 per share. Unilever Foods was the most battered company of the session as it fell Rs152 to Rs20,847 per share, followed by Philip Morris Pakistan that dropped Rs30 to Rs770 per share.
JS Research in its market wrap said range-bound activity continued due to a lack of positive triggers amid Covid's fifth wave. “We expect that news regarding the resumption of the IMF programme will improve volumes and market sentiment,” the brokerage said.
Cnergyico PK led volumes chart with 25.45 million shares, trailed by TRG Pakistan Ltd with 21.12 million shares. Stocks that recorded significant turnover included Hascol Petrol, WorldCall Telecom, Hum Network, Treet Corp, Fauji Foods Ltd, Bank of Punjab, Ghani Global Holdings, and Telecard Limited.
Turnover in the future contracts increased to 196.31 million shares from 65.19 million on the last trading session.